Consumer Confidence Index Declines

April 24, 2007byJCK Magazine

The Conference Board Consumer Confidence Index, which had decreased in March, retreated further in April. The Index now stands at 104.0 (1985=100), down from 108.2 in March. The Present Situation Index decreased to 131.3 from 138.5 in March. The Expectations Index declined to 85.8 from 87.9.

“Unlike the decline in March, which was solely the result of apprehension about the short-term outlook, this month’s decline was a combination of weakening expectations and a less favorable assessment of present-day conditions,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Rising prices at the gas pump continue to play a key role in dampening consumers’ short-term expectations. The decline in the Present Situation Index — the first decline in six months—warrants monitoring in the months ahead, as further declines would suggest a softening in growth.”

Consumers’ appraisal of current-day conditions was less positive in April. Those claiming conditions are “good” declined to 26.5 percent from 28.6 percent. Those saying conditions are “bad” edged up to 15 percent from 14.5 percent. Consumers were also less upbeat about labor market conditions. Those saying jobs are “hard to get” rose to 20.4 percent from 18.9 percent. Those claiming jobs are “plentiful” decreased to 27.8 percent from 30.3 percent in March.

Consumers continue to view the short-term outlook with a degree of caution. Those anticipating business conditions to worsen in the next six months rose to 10.2 percent from 9.8 percent. Consumers expecting business conditions to improve decreased to 13.5 percent from 14.5 percent.

The outlook for the labor market did not change significantly. Consumers expecting fewer jobs in the months ahead dipped to 15.7 percent from 16 percent. Those anticipating more jobs to become available edged up to 12.9 percent from 12.7 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 17 percent from 18 percent in March.

The survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS.